Carbon budget

The carbon budget is a key concept in the fight against climate change. It is the total amount of carbon dioxide (CO₂) that can be emitted into the atmosphere while keeping global warming below a specified level. In other words, it is the emission limit we must stay within to avoid the worst impacts of climate change.

Greenhouse gases and the greenhouse effect

To understand the carbon budget, it helps to start with the greenhouse effect. Certain greenhouse gases in the atmosphere, such as carbon dioxide (CO₂), methane (CH₄) and nitrous oxide (N₂O), trap part of the heat radiated by the Earth. This natural process keeps the planet warm enough to sustain life.

However, human activities such as burning fossil fuels (coal, oil and natural gas), deforestation and intensive agriculture release large amounts of greenhouse gases. This excess intensifies the greenhouse effect and pushes global temperatures up.

Global warming and its consequences

Global warming has severe consequences for the planet, including:

• Rising sea levels: melting glaciers and polar ice raise sea levels and threaten coastal communities.
• Extreme weather: hurricanes, droughts, floods and wildfires become more frequent and intense.
• Biodiversity loss: shifting ecosystems endanger many plant and animal species.
• Health impacts: extreme heat, air pollution and the spread of vector-borne diseases are among the main health risks linked to climate change.

The carbon budget: a limit on emissions

To prevent the worst effects of climate change, the Paris Agreement set the goal of holding warming well below 2°C and pursuing efforts to limit it to 1.5°C above pre-industrial levels. Meeting that target means strictly limiting the total CO₂ still released into the atmosphere.

How much CO₂ can we still emit?

The remaining carbon budget is the amount of CO₂ that can still be emitted without exceeding a given warming limit. Estimates are updated every year and have shrunk sharply as emissions continue. According to the Global Carbon Budget 2024 and the Indicators of Global Climate Change assessment, the remaining budget for a 50% chance of staying below 1.5°C was around 130 gigatonnes of CO₂ from the start of 2025. With global CO₂ emissions from fossil fuels at a record of roughly 37 gigatonnes per year, that budget would be used up in only a few years at current rates.

The urgency of climate action

The carbon budget is running out fast. Every year of continued emissions shrinks the amount of CO₂ that can still be released before the 1.5°C threshold is crossed, which is why the pace of decarbonisation matters so much.

Why the carbon budget matters for businesses

The carbon budget is not only a global concept. Companies are increasingly expected to align their own trajectories with it, for example through science-based targets that translate the global budget into company-level reduction pathways.

Corporate responsibility and climate change

Businesses have a responsibility to act on climate change. Calculating and managing their carbon footprint is the first step to understanding their impact and setting credible emission reduction goals.

Benefits of carbon management

Managing carbon emissions benefits both the planet and the business:

• Stronger reputation: consumers increasingly prefer companies that take sustainability seriously.
• Lower costs: improving energy efficiency and cutting resource use generate savings.
• New opportunities: the shift to a low-carbon economy opens markets in renewable energy and efficiency.
• Regulatory compliance: environmental rules are tightening and non-compliance can bring financial penalties.

Understanding and managing the carbon budget is essential for both global climate action and corporate sustainability. At Manglai we help companies measure their carbon footprint and align their reduction plans with climate goals. Discover how Manglai can help you.